Apple was outbid by HP for Palm acquisition - report

Posted:
in iPhone edited January 2014
Apple reportedly sought to purchase its smartphone rival Palm earlier this year, but was outbid by PC maker HP, which paid $1.2 billion for the struggling company.



Dan Frommer at Silicon Alley Insider on Thursday reported that Apple was in the race to buy Palm, along with Google and Research in Motion. That information comes from an anonymous source familiar with the negotiations.



"Apple was mostly interested in Palm's huge library of intellectual property and patents (450+ patents on file, another 400+ applications on file)," the report said. "And unlike some other bidders, Apple even seemed committed to funding Palm's operations, perhaps to challenge RIM's dominance in the keyboarded segment of the smartphone industry, our source says."



Frommer also said that Google was interested in Palm's intellectual property too, but was allegedly more interested in the company because it "thought Apple might want it. But Google supposedly didn't know Apple was bidding for Palm, so it didn't proceed."



But HP ended up sealing the deal, and now owns Palm's creations, including its much-touted webOS mobile operating system. The company plans to use webOS on future tablet devices that it hopes will compete with Apple's own iPad, also based on an operating system originally created for a smartphone.



Palm and Apple have one significant connection in Jon Rubinstein, who helped to invent the iPod for Apple. He is credited with discovering the 1.8-inch hard drive within Toshiba's labs, and placing it inside Apple's iconic portable music player. Rubinstein later retired from the company, where he was was last the vice president of the iPod division, in 2005.



Two years later, Rubinstein joined Palm, and just last year, with when its Pre smartphone went on sale, he was named the new chief executive of the company.
«13

Comments

  • Reply 1 of 42
    tulkastulkas Posts: 3,754member
    The most interesting part of the original article was how close RIM came to buying them. RIM's original bid was substantially higher than the bid HP won with, but revised their bid to just below HPs bid and lost.



    RIM has done very well as a company main led by engineers with nowhere near the vision that Apple has. Had they won and had an infusion of palm (and so a bit of Apple) they could have become a serious threat to Apple in the consumer space.
  • Reply 2 of 42
    blastdoorblastdoor Posts: 1,931member
    It might have made sense for Apple to buy Palm... they could have used Palm as a way to compete against Google on Verizon's network, while always making sure that Palm was just a little behind the iPhone. Plus there's all the IP. Oh well, maybe Apple has better ideas for how to spend their cash.
  • Reply 3 of 42
    prof. peabodyprof. peabody Posts: 2,860member
    Quote:
    Originally Posted by Tulkas View Post


    The most interesting part of the original article was how close RIM came to buying them. RIM's original bid was substantially higher than the bid HP won with, but revised their bid to just below HPs bid and lost.



    RIM has done very well as a company main led by engineers with nowhere near the vision that Apple has. Had they won and had an infusion of palm (and so a bit of Apple) they could have become a serious threat to Apple in the consumer space.



    Yeah, I agree.



    It seems some business-head at RIM may have thought they could hardball the price (since Palm was desperate at the time), and perhaps lost the whole deal. RIM + Palm would make for better competition than HP ever will.



    I still like the iPhone far better than any of the alternatives though, (and especially kind of despise Android), so having Apple buy up Palm would be my best case scenario. Too bad neither scenario will ever happen now.
  • Reply 4 of 42
    wurm5150wurm5150 Posts: 763member
    Interesting.. Can you imagine combining webOS tech with iOS? This would've put Apple on multiple U.S. carriers too..
  • Reply 5 of 42
    tulkastulkas Posts: 3,754member
    Quote:
    Originally Posted by Prof. Peabody View Post


    Yeah, I agree.



    It seems some business-head at RIM may have thought they could hardball the price (since Palm was desperate at the time), and perhaps lost the whole deal. RIM + Palm would make for better competition than HP ever will.



    I still like the iPhone far better than any of the alternatives though, (and especially kind of despise Android), so having Apple buy up Palm would be my best case scenario. Too bad neither scenario will ever happen now.



    Agreed on all points. RIM realized they overbid, but dropped the followup too far. I would stay with Apple, but it would have been interesting to see what the result of Apple DNA (via Palm) being infused into RIM would have produced. They have some great engineering talent, but if they want into the consumer space, they need something to match Apple's finesse.
  • Reply 6 of 42
    I'm glad that Apple lost the bidding. It means that there is a chance that HP will create something wonderful. I've read that HP usually screws up acquisitions and products from other companies. I hope this time they let the WebOS guys create something then just build it without screwing it up.



    Competition is a good thing, especially when the other company is capable of funding research into new things without worrying too much about funding.
  • Reply 7 of 42
    bregaladbregalad Posts: 816member
    Apple's interest was definitely in the intellectual property. I think they're scared that Palm held the rights to some of the features of iOS. Imagine what would happen to Apple if some judge granted an injunction on sales of all iOS devices.
  • Reply 8 of 42
    Let me guess: Palm had a patent on how to hold a mobile phone in the palm of your hands without a problem?
  • Reply 9 of 42
    psych_guypsych_guy Posts: 459member
    Quote:
    Originally Posted by schmrtzzz View Post


    Let me guess: Palm had a patent on how to hold a mobile phone in the palm of your hands without a problem?



    Jesus, we couldn't go 10 posts without some dumb ass troll blowing off topic and bringing up the antenna issue.
  • Reply 10 of 42
    sevenfeetsevenfeet Posts: 398member
    What this article tells me is that much like in the bidding war against Google for AdMob, Apple is willing to open their pocketbooks if they feel if it's in their best interests, but they are not willing to overpay for anyone despite their huge war chest. That's important for shareholders. I'm sure that they weighed the pros and cons of paying patent fees over a number of years versus the benefits of owning the IP outright over a number of years. It seems unlikely that Apple would have continued WebOS in any form outside of continuing support of existing users. Despite RIMs dominance in the hard-keyboard market, few people complain that the iPhone doesn't have a keyboard anymore, especially in the era of Android where the majority of those new phones are all touchscreen only interfaces.



    For the other bidders, they had their own objectives for acquiring Palm. RIM wanted the IP but they need the overall tech of the Palm OS far more than Apple does. I'm sure that Apple feels hiring HP's engineer responsible for WebOS' notification engine was a far cheaper play than paying too much for Palm.



    Google, like Apple, just wanted the IP since they thought Apple was going might be playing for it (much like the AdMob acquisition). But I suspect they realized that Wall Street thinks they paid too much for AdMob (especially since Apple had a second choice M&A target) so they would not make the same mistake again.



    That leaves HP which actually wanted to use WebOS for other things in their product strategy. A lightweight version of WebOS in devices like printers would be a far better interface than what's in HP's current products. And it gave them a platform for tablets and phones they didn't have otherwise which means they wouldn't have to depend on Microsoft or Google for OSes. The IP ownership was a bonus. In the end, that was worth $1.2 billion for HP.
  • Reply 11 of 42
    replicantreplicant Posts: 121member
    Quote:
    Originally Posted by Blastdoor View Post


    It might have made sense for Apple to buy Palm... they could have used Palm as a way to compete against Google on Verizon's network, while always making sure that Palm was just a little behind the iPhone. Plus there's all the IP. Oh well, maybe Apple has better ideas for how to spend their cash.



    As a shareholder, I am glad the transaction didn't happen. That amount of money is better spent on new product development for the iPhone than securing patents. After all, with their cash reserve, they can afford some good lawyers. And from the looks of things, it seems like webOS will die a slow death at HP...what better outcome can you ask for really.
  • Reply 12 of 42
    rot'napplerot'napple Posts: 1,839member
    Quote:
    Originally Posted by Psych_guy View Post


    Jesus, we couldn't go 10 posts without some dumb ass troll blowing off topic and bringing up the antenna issue.



    What makes him a troll?



    The fact that he or she only submitted ten posts to your 109?



    The fact that he or she registered close to six months before you?



    It is you who brought up the word antenna not him? It is Apple's problem that this has gone on to the extent that it has that one can merely say "hold a mobile phone in the palm of your hands without a problem" and have those in the loop know what that means. Does that make them a troll? He has the word "Palm" in his post and you don't and what is the subject about? Palm acquisition!



    I don't see troll. I see someone who has the same slapstick comedy mentality that can be found in many a posts I submitted!



    Oops, I guess that makes me a troll...
  • Reply 13 of 42
    anonymouseanonymouse Posts: 6,580member
    Quote:
    Originally Posted by Rot'nApple View Post


    What makes him a troll?



    The fact that he or she only submitted ten posts to your 109?



    The fact that he or she registered close to six months before you?



    It is you who brought up the word antenna not him? It is Apple's problem that this has gone on to the extent that it has that one can merely say "hold a mobile phone in the palm of your hands without a problem" and have those in the loop know what that means. Does that make them a troll? He has the word "Palm" in his post and you don't and what is the subject about? Palm acquisition!



    I don't see troll. I see someone who has the same slapstick comedy mentality that can be found in many a posts I submitted!



    Oops, I guess that makes me a troll...



    Oh, well, yeah, you are a troll. And no, you aren't a comedian.
  • Reply 14 of 42
    29922992 Posts: 202member
    Quote:
    Originally Posted by schmrtzzz View Post


    Let me guess: Palm had a patent on how to hold a mobile phone in the palm of your hands without a problem?





    Actually, best post since a while now.
  • Reply 15 of 42
    mstonemstone Posts: 11,510member
    Quote:
    Originally Posted by Blastdoor View Post


    It might have made sense for Apple to buy Palm... they could have used Palm as a way to compete against Google on Verizon's network, while always making sure that Palm was just a little behind the iPhone.





    Apple has never done anything like that as far as I remember. They acquire companies and close the doors.
  • Reply 16 of 42
    Another 'anonymous' source. Why can't these sources allow their names to be used? Oh....we might see their real intentions.....stock manipulation.
  • Reply 17 of 42
    Quote:
    Originally Posted by schmrtzzz View Post


    Let me guess: Palm had a patent on how to hold a mobile phone in the palm of your hands without a problem?



    That's just wicked! Funny, but still wicked! Made me laugh!



    Best
  • Reply 18 of 42
    rabbit_coachrabbit_coach Posts: 1,114member
    Quote:
    Originally Posted by 2992 View Post




    Actually, best post since a while now.



    Yeah kind of funny it is. Now Apple has to buy HP to get the mentioned patent.
  • Reply 19 of 42
    sevenfeetsevenfeet Posts: 398member
    I just read the original article. What the Appleinsider piece didn't mention was why Nokia didn't play.



    I would think that Nokia would have the greatest reason of all to acquire Palm. Symbian isn't considered a leading smartphone OS by anyone and a portfolio of WebOS phones could have really changed the balance of power in the smartphone game, especially outside of the US. They certainly could have delivered a WebOS tablet. And it might have made the whole Apple vs. Nokia legal battle over IP a lot more interesting.



    But they didn't seem to play at all, which is mystifying.
  • Reply 20 of 42
    sevenfeetsevenfeet Posts: 398member
    Quote:
    Originally Posted by Rabbit_Coach View Post


    Yeah kind of funny it is. Now Apple has to buy HP to get the mentioned patent.



    An interesting idea, but not necessary. HP probably makes a fair amount of money on licensing their IP (much like IBM) so I suspect that it wouldn't have been that hard to cut a deal. It's just another line of business for them.
Sign In or Register to comment.